Coffee shops find business grinding to a halt

Exactly one year after launching the Storyteller's Blends of coffee, Lori McCombs, owners of Leaves & Beans Roasting Co., is calling it quits.

Catharine Schaidle

Exactly one year after launching the Storyteller's Blends of coffee, Lori McCombs, owners of Leaves & Beans Roasting Co., is calling it quits.

"It was just a combination of circumstances," McCombs said. "I had a big opportunity come at an inopportune time. I took the risk with Storyteller's and then the economy shifted and what seemed like a perfect opportunity went sour very quickly after the turn of the year."

It was last Thanksgiving that McCombs announced what seemed like a winner when she landed a deal with HarperCollins Publishing to cross market her coffee products with eight of its national best sellers.

"A week before (last) Christmas, my venture-capital for $250,000 couldn't deliver, " she said, adding that it has been getting tough to get financing to continue executing her business plan.

In theory, she added, she should have succeeded because Storyteller's was already in two Macy's outlets in the Chicago area and in the Barbara's Bookstores.

"But I needed money for a marketing team. I couldn't do it all by myself," she said. "Storyteller's is a great idea and generated a great deal of excitement and it allowed me an opportunity to counteract Starbucks," she said.

When Starbucks came to the Peoria market it not only affected her business but that of every cafe in town, she said.

It was McCombs who initiated a coffee cooperative to help local cafe owners remain in business. Today, many of them are closed or just hanging on. Deja Brew in Eureka and Jesters by the Bradley campus closed a year ago. The Daily Buzz closed two of its stores.

"Those are my wholesale clients," she said of the other cafes.

When McDonald's added specialty coffee to its fast food business, that also changed the dynamics, she said.

Small, independent businesses, in general, are in trouble, said Frank Abdnour who owns the Spotted Cow.

"Starbucks can close 200 shops and still be in business," Abdnour said. "What they do to independent businesses is just sad."

Abdnour said he is especially frustrated that it happened to Leaves & Beans. "It's really sad for us because we get all our coffee from her," he said. "The service, the reliability, the quality, you cannot compare. It's disconcerting for all of us."

Brad Coyle, who opened his two Java Jolt cafes in 2003, said sales are down, but he's holding steady. "It's not that bad," Coyle said. "We've seen a decline since the beginning of summer."

His downtown store at the Merrill Lynch Building at the corner of Liberty and Adams, however, is doing well.

"We get a lot of business from the Caterpillar folks downtown," he said.

Eric Eidson of Cool Beans Cafe in Morton said he also is facing a dilemma, with the closing of his supplier Leaves & Beans.

"It's really just a struggle to figure out what the next step is, particularly having to find a new supplier," Eidson said.

Eidson said he is at the point where if he drops his prices too much, he's not going to be able to cover his costs.

"Unlike Starbucks or Wal-Mart, there is no cushion for the small businesses," Eidson said.

Susan Crisler of Joe Brews Coffee and Cakes in Germantown Hills can thank the icing, or rather the fondant, on her cakes for her ability to diversify. Even as her coffee shop sales dipped, demand for her sculpted cakes took off.

So she shut down her two outlets and moved her bakery into her garage where her new business "That's a Cake?" is booming. Without overheads, Crisler says she can actually turn a profit.

Meanwhile, McCombs hopes to use her creative and marketing skills in another position somewhere else. But to anyone who is looking to buy a business she says, "November and December is when we make 30 percent of our business, so now is a good time for anyone to buy it."

Catharine Schaidle can be reached at (309) 686-3290 or cschaidle@pjstar.com.

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